No matter how much we plan and budget, life always throws us curve balls that can create unexpected expenses like medical bills, student expenses or car repairs. Thankfully, there are numerous options for paying off those unplanned expenses as quickly as possible. Each option has its pros and cons, so carefully consider each one before deciding what to do.
There are different types of short-term loans that you can use to pay off unplanned expenses. They include:
- Payday loans
- Personal loans
- Secured loans
- Credit card cash advances
The simplest and most straightforward short-term lending option is payday loans. Payday loans are loans of up to $1,000 that usually must be paid off within a month or when you get your next paycheck. According to GreenStarCash, payday loans are usually funded the same or next day you apply.
Banks and credit unions also offer loans for personal use. These loans are paid back in installments over a predetermined amount of time. They may require a higher credit score than payday loans but usually have lower fees or interest. The maximum loan amount, loan term, and APR will vary based on the lender as well as your credit score and debt-to-income ratio.
If you are struggling to get approved for a personal loan, consider a loan that requires collateral such as a car title loan or a home equity loan. Lastly, you can borrow money against your credit card limit with a credit card cash advance.
While you can put your unexpected expense on any credit card, you may end up paying quite a bit more with the interest. However, many credit cards offer 0% APR for a year or more when you apply for a new card, so you can charge your expenses interest-free and take your time paying them off.
Alternatively, you can use a credit card you already have and pay it off as soon as possible. Keep in mind that it will acquire interest after your next credit card statement, so try to pay it off as soon as possible. If you don’t have enough credit available, you can ask your credit card provider to increase your limit. If you are looking to learn more about different credit cards read more here.
Sell Some Personal Items
With apps and websites like Facebook Marketplace and OfferUp, it’s never been easier to sell your unwanted stuff. Consider selling clothes, jewelry, electronics, and other items that you haven’t used in a while. Or, you can go old-school and organize a garage sale or take your stuff to a local pawn shop.
Reduce Your Expenses
To free up some of your income, you can reduce spending in other places. To effectively analyze where your money is going and what you can cut back on, you will need a budget. If you don’t have a budget yet, it’s a good idea to make one. You can use a simple spreadsheet or a budget app like Mint.
Once you have your budget, evaluate how you could reduce your current expenses. Look at how much money you spend on things like eating out, entertainment, and monthly subscriptions. Consider where you could temporarily cut back to have extra money to pay off your unplanned expenses. After you have paid them off, you can go back to your previous spending habits.
Take a Side Job
Side hustles are becoming more common, and there are several ways you can make some extra income when you have extra time. If you have a car that is less than ten years old. You can drive for a rideshare company like Lyft. If the idea of strangers in your car doesn’t sound appealing, you could drive for a food delivery app like Postmates or Instacart.
For work-from-home options, you could pick up some freelance work from websites like Upwork. For artists, you could sell content online using apps like Patreon. In this day and age of the gig economy, there are so many options for making some quick extra cash.
Ask for Help
You may have a family member or close friend who would be willing to give you a little money. Or a loan to help you out in an emergency. Don’t be afraid to ask for what you need.
If you don’t personally know anyone who can help you with some cash, you can try crowdfunding on websites like GoFundMe. It’s free to make an account and ask the public for donations for your unplanned expenses. You can easily share your donation request on social media and with family and friends via email.
You never know when unexpected expenses will pop up. Which is why it’s great to have some emergency options in your back pocket. Depending on the details of your current financial situation and how much the unplanned expenses cost, you may even want to mix and match two or more pay-off options. Do what works best for you to pay off those expenses as easily as possible so that they aren’t weighing you down.